Accumulate Ahluwalia Contracts on every dip: Tater

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Accumulate Ahluwalia Contracts on every dip: Tater

Accumulate Ahluwalia Contracts on every dip, says Ashish Tater, Head of Research, Fort Share Broking.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Ashish Tater See what other Experts & Brokerages are saying about Ahluwalia See messages about Ahluwalia Ahluwalia BSE | NSE 29/05/12 Are Mutual Funds betting on Ahluwalia?

Accumulate Ahluwalia Contracts on every dip, says Ashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "Ahluwalia Contracts India has been on the analyst radar but what I like about this stock is that promoters have actually sensed that by just being present into a realty sector they will not be able actually match on the earnings growth momentum. Their order book right now stands close to Rs 5300 crore with net profit margin of close to 5.5-6%. For the full year the company would clock close to Rs 1400 crore of sales and for the first two quarter itself the company has got order close to Rs 1000 crore."

He further added, "The management has actually forayed into urban infra with their latest project coming for Rs 72 crore odds for the Kota Bus Terminal, which gives me a sense that the promoters are trying to shift more and diversify into a space which is more stable and has got better cash flows to generate from a longer-term perspectives. So for the next year I feel the company would get close to Rs 300-350 odd crore into the urban infra space as a order book and close to Rs 5000 crore which covers for at least 2-2.5 years of their market cap, their order book to sales."

"I see a company available on a market cap which is just Rs 1000 crore odd having stability for Rs 2-2.5 crore in terms of topline and bottomline. Also most importantly one of the largest civil players with quality projects undertaken by them, I feel the stock is undervalued and would definitely get re-rating once their foray into urban infra space gets reflected. We have pegged the target of close to Rs 200 for next 12 months but this is one stock, which should be accumulated on every dip. There was a panic bottom for the stock around its close to Rs 130 odd levels, so I don't see much of downside into the stock but good upside."